agreed with NJR

Dear NJR,

Its more clear now. Thanks.

The doubt which remains is that if really an outstanding is due, why aren't they straightaway asking for it.

I mean if its due then why do want to adjust it against any future refund which may or may not ever happen.

Does it mean that its really not urgent for them to get this money?

My amount is really high and I am a little tense about it. Although being salaried, all my taxes and corresponding returns are filed, not sure how did this mistake happen.

Gaurav

Originally posted by : NJR
	Dear All, Communication recd with Subject line "Communication on Arrear Demand" is in response to recent move by the CA fraternity against adjustment of very old demands agst refund due of Asst Yr 09-10 / 10-11. Various associations had raised their voices agst such kind of wrong adj. by CPC without knowing genuineness / existance of such demands. CPC Authorities incl. Commr. (CPC) has replied in defence that they have provided training to the Jurisdictional ITOs to upload data relating to Old Outstanding Demands from their DC Register. ITOs have uploaded the data but without taking into account any pending rectification application & its processing. So CPC had no choice then to adjust said outstanding demands against refund dues eventhough wrong demands. When any assessee receives Intimation u/s 143(1) as per which Refund receivable is adjusted against any old outstanding demand, pls check the records pertaining to that asst yr. to verify whether demand raised/adjusted is correct or not. As per Intimation if they say AY 2008 that means Demand adj pertains to Asst Yr. 2008-09 (i.e. yr end 31.03.2008). If as per the record of the assessee demand is correct but said demand has already been paid then one can write letter for rectification to the Jursidictional ITOs (not to CPC, Banglore) & claim refund for that Asst Yr (i.e. for Asst Yr 2008-09). In most cases, old demands relates to pending rectifications. In that case, give reminder to rectify & request refund of demand wrongly adjusted. Local Assessing Officer have issued refunds in many cases of the similar nature & they are bound to do it. Communication recd from CPC with this subject line is just to clarify their stand as who will rectify the wrong adjustment of demand so that no confusion regarding procedure to be followed in such cases. Regards,

Hi NJR,

Happy Diwali !! Many Thanks for your clarification, and that of Balaji, which would have made many of us breathe eaasier.

However , i still have some questions on my mind, which i have listed just below the following para which gives the background. Do note that i am a layperson & not a CA, so pardon me if my questions lack sophistication :

I checked my returns for AY2008-09, as you have clarified that AY "2008" in the notice means AY 2008-09. My taxes were paid exactly as computed by my CA, and my returns filed on time. No there was no refund expected by me, and so also, no amount payable. Part of the tax was TDS deducted by my bank on an FD & part was Self Assessment. This self assessment was paid online, for which acknowledgement was printed & attached with returns, so also TDS certificate. My arrears communication now mentions a demand in excess of total taxes paid for that year !!

(a) The "statement of arrear demand" attached with the "communication of arrear demand" mentions the Section as 143(1) & gives a DIN (Doct Identification No). But NO SUCH DOCUMENT/DEMAND has ever been received by me. So is this DIN some internal reference of the IT office ?

(b) While the notice has my name & PAN no correct, the address shown is not mine, in fact no part of the address applies to me. Given that my address in the actual returns - ITR2 & Acknowledgement is correct - where has this totally wrong address come from ? Has there been some data / upload problem at IT/CPC end & is the arrears demand actually of some other tax payer & not of myself ?

(c) As checked by me, there were certainly no arrears for AY 2008-09, and i did not have the sort of income to warrant such a huge arrears demand for that year. Is there any chance that the demand itself pertains not to AY 2008-09, but to some previous year, even though it mentions AY 2008 ? (In any case, i have never recieved any demand notice ever, till the current arrears demand,simply asking this to know if i need to back-check last 5-10 years returns).

(d) As suggested by you, i will also give a formal letter asking for clarification regarding the demand & for rectification of Demand Register / CPC database. Will they give acknowledgement for receipt of my letter ? And if it is indeed an error pending rectification, will i be intimated once the rectification is done ? Else how will i know if any demand is pending in their database ? I certainly am not comfortable with the idea of any future refund being wrongly adjusted against this arrear demand (this option is given to Balaji by the IT officer).

Thanks & Regds,

Bosco

Originally posted by : Balaji
	Dear NJR, Your understanding of the current situation faced by several assessees is almost perfect and the solutions you have offered are practical.I request your views after perusing the following facts : 1) My mother (for A.Y.2008) and I (for A.Y.2006) also received such E-mail messages from CPC,Bangalore on 23.10.2011 and today I discussed the issue with the A.O. where I filed the Returns for the said years (Salary Processing Centre at BKC,Mumbai) [even though the jurisdictional A.O. mentioned on both the intimations received from CPC was Ward 17(2)-2,Mumbai]. 2) In my mother's case,due to a technical error the System had raised a Demand for A.Y.2008-09 but the ITO had on her own motion (without my applying for a rectification) rectified the Demand u/s 154 in 2010.There is no Demand reflecting in their system now.But since CPC,Bangalore has this Demand in their records,she suggested that I wait till this Demand is adjusted against any future refund and subsequently approach BKC,Mumbai and claim the refund for A.Y.2008-09. 3) In my case,while processing u/s 143(1) the system had not included the self-assessment tax that I had paid for A.Y.2006-07 and a Demand was raised on me.But the same was rectified in 2007 on an application by me u/s 154 and a refund issued.Today the A.O. mentioned to me that the rectification must have been carried out manually in 2007 and she suggested the same way forward like the one mentioned for my mother,i.e. wait for the actual adjustment of Demand to take place at a future date in CPC,Bangalore and then approach BKC,Mumbai for refund of Demand amount adjusted against A.Y.2006-07. Need your expert opinion on : 1) Should I take up the matter with our current jurisdictional A.O. mentioned in the 2 Communications(aka Ward 17(2)-2,Mumbai)? Or should I keep quiet till the Demands are actually adjusted in some future year and then take up the issue with BKC,Mumbai(as suggested by the ITO today)? 2) Does the solution suggested by the ITO at BKC,Mumbai make sense to you?As already explained above,there are no Demands pending in both the cases and I've documentary evidences for the same.But since CPC,Bangalore has made its position clear that it would not involve itself in clearing issues related to old outstanding Demands(as reflected in their system) and would go ahead and adjust the same against future refunds,if any, the only other option left open is to approach my current jurisdictional A.O. but I wonder how helpful it would be.Would be obliged for your advise. The post is long since I had to give the full facts but trust you would help me out.Helpful suggestions from other experts/Forum members is also requested.Many thanks in advance to all.

Hi Balaji,

Happy Diwali !!

I expect NJR will reply with his views.

However, purely as a layperson, my 2 bits :

I certainly am NOT COMFORTABLE with the idea that a GENUINE future refund will be adjusted against this (wrong) arrear demand.

To my untrained eye it seems like passing the buck (so that the problem becomes some other officer's headache a few years down the line), but maybe i am wrong.

Correct approach, in my layman's opinion, would be to rectify the error now itself so that the arrear is removed from the demand register & CPC database.

Eagerly awaiting NJR's take on this.

Regards,

Bosco

Dear Bosco,

Could not agree more with your views.Unfortunately what you are talking of is a professional set-up with well-entrenched systems but I'm afraid our I.T.Department is far removed from such an environment.

You are right-when my future refunds actually get adjusted against these fictitious/erroneous Demands at some future date,the officer with whom I interacted yesterday may not be around and the new one could come up with a different view.And all these would require lot of follow-up and leg-work(costing time and money)-to recover monies which in the first place were never due from me!!!!

I am eager to read "NJR"/other experts' views on my experience.

@ all

please read the below para carefully and do the needful 

1) make a sheet of your notices / assessment order and if there was any demand / re-assessment, then the demand was paid and communicated. make it yearwise in tabular form

2) communicate the facts with order issue authority (in most cases its CPC) under copy to 

a) your respective ITO 

b) Commissioner of incometax of your area

c) incometax ombudsman of your city

state in letter that you do not have any arrear dues and in support you have attached the table, and request them to rectify their records under intimation to you.

once the ombudsman takes the case in his hands, the matter is expected to get resolved within 3 weeks. keeping silence may drag troubles for future.

Thank you,Mr.Sharma,for your guidance.A few clarifications,please :

1) I live in Mumbai and have filed my Returns in the past

    a) initially at the jurisdictional Ward

     b) subsequently at Salary processing Centre at BKC,Mumbai, and

     c) finally online filing from A.Y.2011-12 ( @ CPC,Bangalore).

So,is it that I must submit an application in each of the above Centres/Ward besides The Commissioner,.I.T. of my area and Ombudsman of my City?

2) Should I include in the Statement only details of years where there was a Demand and which were subsequently cleared either by paying the Demand or moving an application u/s 154?

3) As you might have noted from my post above,in my mother's case there was a systemic problem due to which a Demand was raised in A.Y.2008-09 (but NOT communicated to me) which they subsequently reversed internally in their records.I came to know of this only when I received recently  the Communication from CPC,B'lore that there is a Demand outstanding against my mother for A.Y.2008-09.It is quite possible that there are more such instances in any of my family member's case.How do we address the same?

4) I presume the said letter(as advised by you) has to be hand-delivered at the office of the Ombudsman.Please confirm.

Heartfelt thanks for your help and Happy Deepavali!

Originally posted by : Balaji
	Thank you,Mr.Sharma,for your guidance.A few clarifications,please : 1) I live in Mumbai and have filed my Returns in the past     a) initially at the jurisdictional Ward      b) subsequently at Salary processing Centre at BKC,Mumbai, and - you have to submit to salary processing centre , and if any rect5ification filed and settled, then add copy to for that authority also.      c) finally online filing from A.Y.2011-12 ( @ CPC,Bangalore). So,is it that I must submit an application in each of the above Centres/Ward besides The Commissioner,.I.T. of my area and Ombudsman of my City? 2) Should I include in the Statement only details of years where there was a Demand and which were subsequently cleared either by paying the Demand or moving an application u/s 154? - you just have to make a statement year wise and final payment / final order 143(1) settled with zero due. ( as like we make in income tax clearance certificates) 3) As you might have noted from my post above,in my mother's case there was a systemic problem due to which a Demand was raised in A.Y.2008-09 (but NOT communicated to me) which they subsequently reversed internally in their records.I came to know of this only when I received recently  the Communication from CPC,B'lore that there is a Demand outstanding against my mother for A.Y.2008-09.It is quite possible that there are more such instances in any of my family member's case.How do we address the same? - as the demand was baseless so they had to reverse it, but you have to reply on the things only which are communicated to you, not on their internal clarical mistakes, unless the assessee is informed, the demand does not stands. 4) I presume the said letter(as advised by you) has to be hand-delivered at the office of the Ombudsman.Please confirm. - Yes, you have to get the copies stamped and signed by all such authorities, (except CPC, where you can use speed post), ombudsman officers will contact you over telephone before taking any action against the issuer of such notice, to understand the facts ( usually it takes less than a week time after submission of grivance), and after confirmation from your side, they issue show cause notice to the issuing officer, under copy to you to redress the grivance within 15 days and intimate the office of ombudsman,  - Genuine complaints get relief within three weeks, and the officer concerned sends you apology for inconvenience caused for their blunder. Heartfelt thanks for your help and Happy Deepavali!

However, before going through the process, its always preferred to check self side, if any assessed dues or other dues are pending, and if its there, its wise to pay the same before such process, otherwise the authority will feel heat for the mis-statement of the assessee.

Many thanks,Mr.Sharma,for a prompt response.None of my family members have any Demands outstanding.I have personally followed up and done the rectifications u/s 154.However,the problem is that though I have subsequently received refunds for the years wherein demands were raised,the Demand Register of the Department has not been updated with the fact.For instance,in my wife's case a Demand of Rs.25,758/- was erroneously raised for A.Y.2000-01 but subsequently after rectification u/s 154 I received a refund of Rs.18,766/- .However the Demand still continues in the Department's records.

Kindly confirm as to how many years' details I have to include in the said Statement for each of my family members?

God Bless!

you dont have to bother for their update of records, 

you represent your side with ombudsman office and they will issue scn to the concerned officer for issue of such notice without any updated record, and they will update their record with intimation to yourself.

Thanks,Mr.Sharma.

hi all,

i understand all of it but one thing that puzzles me is the way this so called demand is being adjusted.

If there is anything outstanding, why doesnt the IT dept just send a order saying that this much amount is pending and that it should be paid immediately. Why say that the demands will be adjusted against a future refund which might/might not ever happen.

gaurav

Sharmaji & Kanagarajji,

Thanks for your contributions to the thread.

However , my laymans query is this :- do you not think that BEFORE involving the Grievance Redressal Cell or the Ombudsman or Commissioner, we should FIRST address a letter ONLY to theconcerned IT Office / Officer saying that there seems to be an error in their records & asking them to rectify the same ? Then IF they do not take action, then maybe later-on we can think of escalation ? Else will they not take offence if we directly involve a higher authority ?

Pardon me if my question is naive, for i do not have much experience in such matters.

Regds,

Bosco

Originally posted by : Bosco Menezes
	Sharmaji & Kanagarajji, Thanks for your contributions to the thread. However , my laymans query is this :- do you not think that BEFORE involving the Grievance Redressal Cell or the Ombudsman or Commissioner, we should FIRST address a letter ONLY to theconcerned IT Office / Officer saying that there seems to be an error in their records & asking them to rectify the same ? Then IF they do not take action, then maybe later-on we can think of escalation ? Else will they not take offence if we directly involve a higher authority ? Pardon me if my question is naive, for i do not have much experience in such matters. Regds, Bosco

The communication is sent by CPC, and not by the the concerned ITO, if you can be able to communicate to CPC and the concerned officer at CPC then the prob would get resolved, but as far as we know, there is no direct communication between the execution bodies of CPC withthe public assessee, unless the commissioner level intrupts or pass instructions for any specific purpose. 

However, if you wish to communicate with CPC then do it, and wait for 2-3 weeks time for redressal of your complaint, if done then ok, otherwise you have to follow up through ombudsman.